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TRADE
Undersecretary Elmer Hernandez announced on Thursday the
government is banking on two steel manufacturers’
operation as well as on zero tariff for cement
importation to ease the impact of these products’
soaring prices on the real-estate industry.
“Konting
tiis na lang [Have a little patience]; we can bring
the prices of steel and cement lower,” Hernandez told
realtors and property developers at the Fourth National
Property Forum, some of whom articulated their worries
that the rising prices of steel and cement would force
many of them to jack up prices.
David
Stanley Redfern Ltd., a British overseas
property-investment consultancy firm, estimates that
construction costs in the Philippines would increase by
more than 35 percent this year “due to record oil,
steel, cement and global shipping prices” on the back of
a weak US dollar.
Hernandez acknowledged the concern and admitted that the
Philippines is more a net importer of steel rebars, the
raw material for billets that, in turn, are required for
construction.
Redfern
Ltd. said in a separate statement that “nearly all
construction materials used in the development of
Philippine high-rise buildings are imported.”
The
United Kingdom-based company’s estimates for an upward
50-percent increase in prices of steel reinforcement
bars, electrical wirings, aluminum, copper based
components and Portland cement in the region would
deeply impact the Philippine property market.
Hernandez said the Department of Trade and Industry
(DTI) is banking on Global Steel Philippines Inc. that
just inaugurated its plate mill manufacturing facilities
last week.
Likewise, he told the BusinessMirror the Board of
Incentives, which Hernandez heads, is keen on granting
incentives to another steel manufacturer that he visited
last week.
“They
are now doing the rehabilitation of their billet shop,
and plan to bring in equipment for the construction of
facilities for pig-iron production,” Hernandez said. Pig
iron is the basic material in manufacturing steel.
The only
publicly listed firm operating in that area is TKC Steel
Corp., which said in an annual report to the Philippine
Stock Exchange that it added another P10 million to its
billet manufacturing plant in Iligan in Mindanao.
Hernandez said until such time these moves bear fruit,
the Philippines would remain gripped by the world market
for steel billets.
Still,
he urged realty developers to explore the government’s
incentive priorities plan that includes steel
production, modernization of billets producing
facilities and integrated logistics for such product as
among business activities that could be awarded four to
five years of income tax holiday, among other
incentives.
Hernandez said the incentives also apply to cement,
especially its transportation and warehousing.
“We’re
also open to the position for reducing tariff to zero,
especially for those who would wish to import cement in
large amounts. We’re exploring that option.”
Currently, tariff on imported cement is at 5 percent.
Vic
Dimagiba of DTI’s Bureau of Trade Regulation and
Consumer Protection, however, gave assurances his office
does not expect prices of cement to increase in the next
six months, according to Chamber of Real Estate and
Builders Association (Creba) officials.
Still,
Hernandez said Creba could consolidate its members’
orders and possibly lower costs.
Besides
the economic woes and soaring demand for steel and
cement in China, an increase in construction costs is
also being fueled by a “hot” property market in the
Philippines, that Redfern Ltd. expects “to grow in value
by no less than 24 percent for the next five years and
possibly even more in the next two to three years.”
Still,
Hernandez admits that the housing backlog of 3.8-million
units continues to be a concern. He urged realtors and
developers to tap the IPP that, he said, also gives
incentives on a project basis for low-cost mass housing. |
